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Karnataka to levy 1% fire cess on new high-rises; experts warn of additional tax burden
Bengaluru real estate: The state said the cess would be compulsory for all eligible buildings, with the obligation to pay falling on developers or home owners
In a move aimed at enhancing fire safety measures, the Karnataka Cabinet has approved a proposal to introduce a 1% fire cess on newly constructed multi-storey buildings across the state. The decision comes as the Cabinet approved the new Karnataka Fire (Amendment) Bill, 2025, and marked a key update to the Karnataka Fire Force Act, 1964.
The new levy will apply to both commercial and residential high-rise buildings that are governed by the provisions of the Fire Services Act.
"This cess will be collected from high-rise buildings, hospitals, industrial companies and so on," law minister H K Patil told reporters on July 24. He specified that the cess would be compulsory for all eligible buildings, with the obligation to pay falling on either the developers or the property owners.
“The fire cess shall be levied in the form of a surcharge at the rate of one per cent on the property tax of newly constructed multi-storied buildings (high-rise buildings) as defined in section 13 of the Act, with effect from the date of commencement of the Karnataka Fire Force (Amendment) Act, 2023,” the amendment said.
According to the state government, the cess would be set at 1% of the property tax and would be used to enhance fire safety systems and improve emergency preparedness in cities and towns.
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Will put more burden on homeowners, say experts
Experts believe the newly introduced fire cess could lead to a higher financial load for urban property owners, particularly in rapidly developing cities like Bengaluru.
However, they also acknowledge that the move has the potential to significantly improve fire safety standards across urban centres. The funds collected through this cess are expected to be channelled towards upgrading fire-fighting equipment, improving response times, and ensuring that high-rise buildings are better equipped to handle emergencies, they said.
“Any additional cost imposed on new constructions will ultimately be transferred to the homebuyers,” said Dhananjaya Padanabhachar, president of the Karnataka Homebuyers’ Forum.
He pointed out that obtaining fire safety clearances, such as the No Objection Certificate (NOC) and fire compliance certificates, is the legal responsibility of the builder or developer. However, in practice, these costs are rarely absorbed by the builders themselves. “Whether it’s regulatory fees, certification charges, or now the new fire cess, these expenses are usually added to the final price of the property, meaning the burden falls on the end buyer,” he explained.
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Padanabhachar said that while enhancing fire safety is crucial, the government must ensure that homebuyers are not unfairly impacted and that developers remain accountable for meeting safety norms without inflating costs disproportionately.
"Fire safety regulations for high-rise buildings are already stringent, covering everything from the initial NoC to final implementation. The proposed additional cess for the fire department will further add to the existing financial commitment of consumers, such as the solid waste management cess, the proposed 1% hike in stamp duty and rising electricity and water charges," Nesara BS, chairman of Concorde, said.
He explained that the living costs are climbing steadily, making it increasingly unaffordable for the home buyer. "Bengaluru risks becoming one of the most expensive cities in India. We need to remain mindful of how these escalating costs of development are becoming an additional expense to the homebuyer"
